Posted by hg(nyc) on November 29, 2000 at 20:29:33:
If he wants to make a deal then he needs to be dead honest with you about what his debts.
You should know that it will “stay” any foreclosure attempts by a mortgage company. It will rid him of any unsecured liens, credit cards, small loans, personal loans, etc. It will not absolve him of the property taxes.
Ch 13 is the “wage earner” plan. Meaning the person will have to file a plan with the bankruptcy trustee showing how he intends to repay his bills over a 5 year period; catch up on the mortgage, pay back taxes. If the plan is not adequate or fails for some reason the bancruptcy judge could dismiss the bancruptcy filing and then he is back to square one. Which means the secured liens holders can pickup where they left off and go after the property again. Also, the judge could say, “sir there is enough equity in your assets(the house) to pay off your creditors I am going to move your chapter 13 over to chapter 7 and liquidate the house to pay your creditors.” I am not sure about this but I have heard that the court can also “REVERSE” some asset sale transactions by the bk filier. Meaning the court could reverse the selling of the house to recapture any equity that has been paid to the bk filer or captured by someone else(you the investor).
Personally, I would dissuade anyone from a bk filing unless it was to stay a foreclosure so that we had some time to work a deal.